The business of hunger

U.S. must reform inefficient food-aid program

May 09, 2013

Men place humanitarian food aid on to flat-bottom boats in Mopti, Mali. The Obama administration plans to reform the Food for Peace Program by focusing more aid on food produced in the countries where it’s consumed. (Reuters)

America sends about $1.4 billion a year in emergency food aid to needy people around the world through the Food for Peace Program. By law, practically all that aid is produced in the U.S. and shipped by U.S. companies to far-flung places, where it is consumed. Some food donations get sold once they're delivered overseas, to fund development projects.

That's a terribly expensive and inefficient system. The high costs of growing and shipping food here mean fewer people get fed. Delivering huge amounts of U.S. grain and other farm products distorts the local markets where it is delivered. It forces prices down, discouraging local farmers from raising staple crops where the need for food is greatest. Selling U.S. commodities abroad is also an inefficient way to raise money for development projects. Getting the food across the ocean boosts its cost by one-third.

The food program is an agricultural subsidy in disguise. Requiring the purchase of U.S. goods, transported only on U.S. ships, creates profits for American farmers and the agribusiness giants that control shipping. But American taxpayers don't get their money's worth.

Food aid is supposed to help relieve suffering. It's also supposed to help lift poor people out of poverty so they can become self-sufficient.

This program desperately needs to change, but the farm lobby works furiously to protect its vested interests. Hunger is big business, and Food for Peace has been a profit center in the Farm Belt for decades.

We're pleased to see the Obama administration make a run at changing that. The timing is good: Congress is under pressure to pass a long-delayed Farm Bill, the five-year legislation reauthorizing farm subsidy programs. The administration has proposed a modest reform that can save money and feed more people.

Under the plan advanced by Obama, about 45 percent of the food aid in 2014 would be used to buy food produced in the countries where it's consumed. The food could be bought locally in bulk, or individual recipients could receive vouchers or debit cards to purchase what they need.

Food bought locally is typically cheaper to produce and it requires no transoceanic shipping. By this simple step, 2 million to 4 million people could be fed each year. The aid could be delivered as much as 14 weeks faster than it is now, allowing the program to be far more nimble when disaster strikes.

Most other wealthy nations already provide food aid in grant form and decouple it from commercial transactions in the donor country. In-kind food aid is limited to acute local shortages, or situations where local food markets aren't functioning.

In the Obama proposal, more than half of U.S. food aid still would be earmarked for the purchase and transport of U.S. commodities, and shippers would receive a government subsidy. There is no sound financial reason for either subsidy, except as a concession to politics. The farm lobby is powerful. A who's who of farm and food organizations already have petitioned the president to keep the status quo for the sake of "stimulating" farm and transportation industries at home.

So here's a test for Congress, particularly for farm-state Republicans and Democrats. The federal government, thanks to sequestration, is finally seeing some serious belt-tightening. Aid programs such as Food for Peace aren't immune from the pressure on spending. They, like all government programs, have to prove they can be done with maximum efficiency.

So, members, take your pick: This reform can feed millions more people at the same cost to taxpayers, feed the same number of people at significantly lower cost, or find some comfortable mix of both goals. But members of Congress who block this reform will expose themselves as wasteful spenders.

As it is, U.S. agriculture interests will still benefit greatly from the compromise plan on the table, on top of the enormous agriculture subsidies the federal government cannot afford but continues to pay.

Food aid can help to lift developing nations out of poverty, promote political stability and economic growth. It must be structured efficiently to achieve its objective. As is, the Food for Peace program doesn't work well, except for the benefit of a privileged few. Reforming food aid would enable America to do justice to a large taxpayer outlay — and to save lives.

Secretary of State John Kerry, Agriculture Secretary Tom Vilsack and Rajiv Shah, administrator of the U.S. Agency for International Development, offer more detail about food aid reform in an essay on today's Perspective page.